Flawed system leads to MLB waiting game

Ubaldo Jimenez (AP Photo/Mark Duncan)
February 4, 2014, 5:02 PM

TORONTO – In theory, the concept of compensating a team that loses a significant free agent with a draft pick makes a lot sense. Suffer some pain in the present? Here’s a little promise for the future to ease the sting. Call it social justice, baseball style.

In practice, however, particularly under the free agency rules of the new collective bargaining agreement, a system meant to be compensatory has turned into one that’s far more punitive, significantly curtailing the market for certain players by excessively punishing the teams that sign them.

Through nearly two full off-seasons now, it’s looking more and more like the process is broken, as evidenced by the five free agents tied to draft-pick compensation—Ubaldo Jimenez, Ervin Santana, Stephen Drew, Kendrys Morales and Nelson Cruz—who remain unsigned with spring training looming.

While each has his warts, they all have far more to offer than other free agents who have signed exorbitant contracts this off-season. And there’s no arguing that the reason they continue to look for jobs is because signing them means surrendering a first-round pick. (To be eligible for compensation, teams must extend their free agents a qualifying offer worth the average of baseball’s top 125 salaries, which this year was $14.1 million for one year; all 13 players to receive a QO this year turned it down.)

That’s why super-agent Scott Boras, giving voice to what many in the industry complain of privately, told Jon Paul Morosi of FoxSports.com that, “This system is not good for the teams or the players. In this system, the reason we’re compensating players is not on the basis of performance but the basis of classification–qualifying offer versus non-qualifying offer.”

While teams forfeiting draft picks in order to land free agents is nothing new—acquiring players classified as Type A under the previous system also meant the surrender of a first-rounder—the new system includes the double whammy of the loss of draft signing bonus pool money attached to the lost pick. It used to be that teams could make up for the loss by choosing a player with signability concerns later in the draft and overpaying them.

Now, that’s impossible, as the spending power of clubs in the draft has been curtailed by the pool system assigning values to specific draft slots, with onerous penalties for surpassing the limit. The bulk of the spending power is in the first-round pick, and by giving that up, a team basically loses all ability to be creative in subsequent rounds, potentially tying its hands for an entire draft.

The dual sanctions are an unintended consequence of the new rules for free agency and the draft taking effect together, artificially limiting the markets for some free agents while preventing teams from freely bidding on players that can help them. It’s like having the money for a luxury item but being deterred by a prohibitive sales tax.

Another ugly manifestation of this is in the concerns the players’ union is voicing to Major League Baseball about club officials publicly discussing terms with free agents, something forbidden by the CBA lest their comments affect a player’s market.

At this point the key focus is on what happens to the “Unfree Five” between now and opening day. As Ben Nicholson-Smith pointed out last week, the Blue Jays are among the teams best positioned to land one of Santana or Jimenez. By virtue of finishing among the bottom 10 in baseball last season, their first-round pick is protected, meaning if they sign a qualified free agent, they would only surrender a second-round pick, lowering the acquisition cost.

“There’s still value with a second-round pick, because it’s still pretty high, so…you still build that into an offer,” Anthopoulos said last week. “But it’s not close to the value of round one.”

Of the other nine teams with protected picks, only two have signed qualified free agents–the Seattle Mariners landing Robinson Cano for $240 million over 10 years, and the New York Mets signing Curtis Granderson for $60 million over four years. The others—Houston, Miami, the Cubs, the White Sox, Minnesota, Philadelphia and Colorado—aren’t considered suitors for the remaining free agents.

Of the 13 qualified free agents this year, only six have changed teams so far (Cano to Seattle; Granderson to the Mets; Shin-Soo Choo to Texas; Jacoby Ellsbury, Brian McCann and Carlos Beltran to the Yankees). Mike Napoli re-signed with the Boston Red Sox while Hiroki Kuroda remained with the Yankees.

Last year, nine free agents received a qualifying offer of $13.3 million, and each rejected the offer. Of the nine, three re-signed with their teams (Kuroda, David Ortiz and Boston, Adam LaRoche and Washington), while two players signed during spring training (Michael Bourn with Cleveland on Feb. 15, and Kyle Lohse with Milwaukee on March 25).

The options for Santana, Jimenez, Drew, Cruz and Morales, aside from settling for unfavourable terms, are limited. They could wait until after opening day to sign, thereby preventing their new teams from extending qualifying offers at the end of the season, and return to free agency next fall unhindered. Or they could wait until after the draft, when the clubs that sign them would no longer have to surrender a draft pick.

Neither is optimal and both carry risk, which is why the handful of teams—including the Blue Jays—willing to wait things out hold the hammer right now. Time, jobs and money are running out while anger and animosity are building, products of a flawed system being played to the fullest.

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